Starting with the broad geopolitical scenario, India’s current roles in international organizations such as the Shanghai Cooperation Organisation (SCO) and the G-20 place it in an instrumental position to coordinate efforts and policies with other nations, including China. The focus on China is significant, given its steady economic growth and the potential future impact of this burgeoning power on the global stage.
China’s Economic Trajectory
During 2022, China witnessed an economic growth of 3%, pushing its GDP to reach 121 trillion yuan or about USD 18 trillion. This reflects an annual growth rate of 5.2% sustained over five years, speaking volumes about the country’s steady development trajectory.
Improvements in People’s Well-Being
China has also made impressive strides in poverty alleviation, lifting nearly 100 million rural residents out of absolute poverty over the past eight years. This operation saw a sizable chunk of the government’s expenditure being channeled towards ensuring the well-being of the populace.
Expansion of Global Cooperation
Between 2013 and 2021, China remarkably contributed an average of 38.6% to global economic growth, overtaking the combined figure from G7 countries at 25.7%. With the introduction of the Global Development Initiative (GDI) by the Chinese President at the United Nations General Assembly in 2021, over 100 nations have shown support and more than 60 countries have joined the Group of Friends of the GDI.
Trade Relations between India and China
China stands as India’s second-biggest trading partner after the US, recording a bilateral trade volume of USD 135.984 billion in 2022. Despite the trade deficit, India’s import of Chinese equipment and materials is notable for reducing the overall cost of products made in India. This not only benefits Indian industries and consumers but also enhances the competitiveness of Indian exports, facilitating India’s integration into global industrial and supply chains.
The Impact of Chinese Investments
Chinese enterprises have been instrumental in creating a significant number of job opportunities that contribute to India’s economic development. They have also expressed an interest in seeing more high-quality Indian goods, cultural and other products showcased in the Chinese market.
The Way Forward
The growth and revitalization of both China and India can bring a substantial boost to developing countries’ forces. They represent the possibility of changing the destiny of about a third of the world’s population and hold significance for the future of Asia and beyond. Given the shared modernisation challenges and as representatives of developing countries and emerging economies, China and India have far more in common than differences.
Previous Year UPSC Questions
One previous question from the UPSC Civil Services Examination explored China’s use of its economic relations and positive trade surplus as tools to develop the potential military power status in Asia, particularly discussing its impact on India as a neighboring country. This highlights the intertwined fortunes and challenges presented by China and India’s economic interplay.